Member Info for Stockpig

.... and the dividend will be cut. It can’t sustain a downward trajectory like this with this lofty 9.4% dividend.

Unlikely. And if the dividend were to be cut, it isn't going to be because of a fall in the share price.

"Never, hopefully phyl, It's only good if the share price is at rock bottom, I would prefer to see the share price rising up to next April's exdiv"

Not quite. Share price is only one of the relevant factors - It can be good to buy back shares at higher share prices if the underlying (intrinsic) value warrants it.

"it also has the potential to continue dropping lower as it's been doing since January 2022 when the share price was over £3, there is no guarantee that it will start rising anytime soon,"

That's fortunate, because I am not looking to sell anytime soon...at these prices or better I am open to buying more though.

"Yes there was an increase in cash generation & operating profit shown at the last results but PHNX still isn’t covering the dividend payments with current earnings or free cash flow. Happy to be proved wrong by those more intelligent than myself."

It's forecast to do so from next year.

"The issues with the Rings of Power is not the source material, the script and story structure are just terrible, like their were written by morons for morons, there just is no depth. If you strip out the CGI the Rings of Power is a complete mess. And unfortunately I do not believe that Amazon can have the strength of character needed to make a 40K tv series in the grim dark vein that's required.

The reason the game Space Marine 2 is getting so much love is that the gameplay and story are solid, and the world is presented in all of its cyber gothic beauty and not watered down."

Right, poor script writing perhaps but that job is made harder by having to create the script from multiple sources and filling in gaps as you go. GAW already has a massive library of complete narratives and characters available from day one and teams of staff who can advise on even the smallest of detail. Not saying it's the biggest issue, just something that complicates the process, and one less hurdle for Amazon to jump over if they get a deal done.

The Boys, Reacher and Fallout tv shows were all by Amazon and pretty good.

Yes, SM2's world is not watered down and much of that is down to the love the developers have of Warhammer but also the attention to detail that GW has when working with them. GW isn't going to give up that sort of focus just to get a deal done with Amazon. If GAW were that easy to negotiate rights with, and were not adamant about having some creative control on the project, I'm sure we would have seen Warhammer movies or shows already.

"I wonder if it is related to the manufacturing expansion talked about earlier this year, and an increase in the cash amount they like to hold?"

Saw a headline earlier today that they are seeking to expand further than what had been announced earlier this year. Planning permission has just gone in for another factory, this time I think for paints.

I think an additional challenge for the Rings of power show is the lack of source material to deliver it. That's clearly not a problem for Warhammer.

I don't see Disney buying GAW or its Movie/TV rights so Amazon may be the best option - it has potentially deep pockets to fund multiple projects and scope for asking for a lot of content to supply its digital channels, not simply the odd show here and there.

I also agree that GAW won't allow a third-party mess around with its IP. One only has to read the interviews with the developers of the SM2 game for example to see how seriously Games Workshop take their stewardship of the brand.

"L&G currently runs a Solvency II Capital Ratio of 223%. (Taken from the half year report.). Most other similar companies run at 180%. There is nothing requiring L&G to run at this level and it could choose to drop to 180%."

Thanks as always Meconopsis. I think I remember reading analysts a year ago suggest that L&G should do exactly this and fund the buy back this way, so it wouldn't surprise me if that is the board's plan from next year. It also perhaps helps explain why the reaction to the start of buy backs was so muted despite being so significant - presumably because they felt the amount was relatively trivial.

If it does, I would be very surprised if the share price doesn't jump significantly after that.

"It's only gonna get bigger as gamers look for woke free zones. Latest Star Wars game, Assasins Creed not going down well."

It's got nothing to do with wokeness. The star wars game was janky and lacked the depth many people were hoping for while copying across some of the mechanics from the other games Ubisoft make. The new Assassins Creed game from what I can see is being criticised largely because of the choice of samurai character - despite the character being an actual historical figure.

"My question is, do we think the buybacks will increase as the savings grow through the years?"

I would assume so. The board hinted at further buybacks being an option with any spare cash raised from the recent Housing Unit sale, and not re-invested so it does appear to be a preferred method of returning cash by the new CEO.

I think a bigger question is what the plan is for dividends from 2028.

Now being reported that 4.5m copies of SM2 sold across the first month

"Pass by GW shop in Taunton a couple of times a week. Very rarely see a customer in the shop.Portent? Hope I am wrong since I am a holder of the shares!"

They tightly monitor shops' performances, closing those that don't do well. I don't think it is the type of business you will see a lot of footfall in most days/ times of the week - given the age group. Much of the selling is probably online. Shops are there as much if not more to provide a physical community.

"Aviva sp has got stronger since Amanda Blanc took over and lgen sp has got weaker i'm not suggesting it's terminal, as i said if this can get back to £2.50 plus before April exdiv then all's forgiven, but the time to say i'm very happy with this share is not when the sp is decline, i'm looking at the total returns not just dividend returns, let's see where we are by next April"

I would say most of us on here are interested in the total returns not just the dividend, we just allow for a longer period of time for the capital element to contribute to that overall return.

As for Aviva, part of the reason it's share price has performed well is because under previous leadership the business did very poorly. Blanc has come in and sold off much of the international business and funnelled that cash back to shareholders. In contrast, L&G has been run much better prior to Blanc's arrival and saw higher returns for that period. I think @meconopsis has written previously that Aviva and L&G business performances over the same time period since Blanc took over, have been roughly the same.

"Roofer, I'm not sure why you are very happy with it mate, you are not getting say 8% yield if you have capital erosion, but should it get back to 2.50 plus by April exdiv then all will be forgiven"

Stock prices are nearly always going to be volatile. But as the Buffett quote posted by @Lending says, if you are looking to be buying shares, you want the prices to be lower rather than higher until you are no longer buying, or wish to sell. Those of us with longer timeframes for investing are prepared to be patient and aren't going to worry to much if the price is lower a year or two from when we first bought as long as the underlying business appears to be doing well.

The only downside to lower prices I can think of off the top of my head, is the risk that either they never recover or you become a forced seller (i.e takeover agreed for less than you paid, or you need the money.)

"All high paying dividend shares carry the same fate , either the Sp goes lateral or down can't think of one share that's gone up over a long term( please enlighten if wrong) ,short term maybe (year)"

This will depend on what you regard as a high paying dividend share and the time frames in which you look at it. For example, in October 2011 L&G was about £1 a share yielding 6.5%. In October 2015 the share price was £2.50 yielding 5% and in October 2021 £2.80 yielding 6%. Yes, the price is currently around £2.25 and yielding 9% but there have been a number of factors at play the last couple of years - and we could be entering a more favourable period in which the price may rise.

Best wishes,

"It's all been a bit silent regards the Amazon deal for the last couple of months. Not sure if it's a good or bad thing, as I'd expect rumours. The last I heard; GAW were holding firm in their requirements for any proposed deal. Let's hope it's not a stalemate.

Either way, the calendar year-end deadline is looming..."

It can only be a good thing, IP is sacrosanct for Games Workshop. If they were to cede anything simply to get a deal done, it could damage the brand. Warhammer fans can be quite fanatical about their world, and it is important for Amazon to respect that. This is a great opportunity for Amazon to land two or more IPs that they could build into a tv/movie franchise as big as the Marvel stuff if they get it right. Last year's agreement indicated that GAW were willing to give up some of the merchandising opportunities to get a deal done, so I think any barriers are likely on the creative side of the project.

"PE shown here and HL as 30. Simply wall st fwd PE of over 40, but says it's undervalued.

High paying dividend is really a trap esp. when you account for inflation and declining sp."

Sharepoint gives fc/PE of 10.4.

Dividend is covered and has been growing slower than earnings in recent years. Forecasts for next few years are for the same to continue. Recent fall in share price has been because of a number of factors (including scare stories on underlying health of company which have been common.). During this period interest rates have risen which have affected value of assets the company owns and the cost of borrowing which L&G also does somewhat heavily. Interest rates are now starting to fall. That dividend yield will be more enticing, underlying asset values should rise, borrowing costs fall and the share buy backs reducing share count. That should all help the share price going forwards.

"It’s not cheap until there’s clarity as to the cost of compensation. Lloyds banks has stuck to the provision made of around £570m, same for Barclays offering clarity as to what they expect the cost of redress to the business.

CBG has not put any figure to it’s expected cost, rather it provided for £400m and then proceeded to sell a biz unit for £200m. How much is the cost, £400m or £600m?

There uncertainty created by the boards failure to put a cost estimate for the redress scheme based upon the consultation till date with the FCA means they have no confidence as to the exact figure. Expect no dividends until 2026. The stock will reprice upwards once the uncertainty subsides."

I don't think this is a failure of the board at all. As far as we are aware the FCA have given no indication to companies as to what their ruling will be so on what basis does CBG make provision given the companies arguments there actions were within the rules at the time? Secondly, when Lloyds and others started announcing how much they were putting aside yet continued paying out dividends and on buybacks, the FCA published a statement criticising companies (not named) for not taking the inquiry seriously.

As for the sale of CABM - isn't that part of the £400m capital figure not in addition to it (I think the idea floating around earlier in the year was that Winterflood would be the one sold?)

"CBG statement has created a lot of uncertainty. If after creating a buffer of £400 million and they still can’t definitely say that dividends will be reinstated in 2025, then it implies that the estimated buffer would be insufficient too cover the car finance compensation scheme. The estimated cost may be bigger than expected."

It's the same statement they made earlier this year. Until the FCA make a ruling on what compensation, if any, is payable then CBG won't know by how much, if at all, they are impacted by it. If you remember when this news first broke some analysts were being quoted as CBG potentially being on the hook for anything up to £850m or £1bn.

As for other companies, they are all impacted differently. For example, Lloyd's has the bigger potential figure to pay out, but it comprises a much smaller part of its business than it does for CBG. Like @Unhooked, I would rather CBG practice caution now, than be approached for a handout if things are worse than hoped.

"Ha. True. Just a shame no dividend announced in parallel. If you look back the last few years there has always been a dividend announced with the September trading update. To be fair it’s so GAW. Just when you think a pattern is emerging they upend expectations. "

I wonder if it is related to the manufacturing expansion talked about earlier this year, and an increase in the cash amount they like to hold?